Organizations today are navigating a rapidly changing risk landscape that poses various challenges for senior leaders and executives.
Emerging technologies, regulatory shifts, and evolving trends are introducing new risks and intensifying existing ones, necessitating proactive governance and risk management strategies. In the Navigating Emerging Liability Risks podcast miniseries, Marsh FINPRO’s liability practice leaders examine directors and officers (D&O) liability, employment practices/wage and hour liability, fiduciary liability, and kidnap, ransom, and extortion risks that organizations might expect to face.
This episode of our Emerging Risks podcast series delves into the transformative impact of artificial intelligence (AI) on corporate governance and liability. Ruth Kochenderfer, Marsh’s D&O Product Leader, hosts Kara Peterman, a partner at Alston & Bird, to discuss how AI—ranging from its origins in the 1950s to modern generative tools like ChatGPT and Dolly—presents both opportunities and new risks for organizations. They explore issues such as data bias leading to discrimination claims, the creation of deepfakes for impersonation and fraud, intellectual property challenges from data scraping, and the significant energy consumption associated with large AI models. The discussion also highlights the regulatory landscape, with the SEC actively monitoring AI use, emphasizing the importance of accurate disclosures and transparency to avoid enforcement actions. Recent trends in securities class actions reveal a surge in shareholder litigation related to AI disclosures, underscoring the need for clear, truthful communication about AI capabilities and risks.
Looking ahead, the conversation considers potential future scenarios, including deepfake impersonations causing financial harm, AI-driven decision-making in the boardroom, and the complex legal implications of AI serving as a corporate director or officer. To mitigate these risks, organizations are advised to understand and document their current AI use, enhance internal communication and training, develop comprehensive disclosure strategies, and engage with D&O insurers to ensure coverage aligns with emerging exposures.
As AI technology continues to advance at a rapid pace, staying informed, adapting governance practices, and fostering a culture of proactive risk management are essential.
For ongoing insights, subscribe to Marsh’s Navigating Emerging Liability Risks podcast series, and for tailored advice on managing AI and liability risks, contact your Marsh representative.
